Korean Rice Wine
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Introduction
Most cultures have their own traditional alcoholic beverage; overtime a few of these have become widespread, well known for their individuality and great taste. For instance, Scotch whiskey, German beer, French wine, Mexican tequila and Japanese sake can be found easily all over the world great examples of these desired beverages; their established dominance in the alcohol industry can be accredited to their peculiar, original and desired characteristics. South Korea has created its own unique alcohol beverage using rice malt commonly known as Rice Wine. Unlike regular wines, which are produced by the fermentation of various grapes and fruits this delicacy is produced through the fermentation of malt rice. This assignment will look at how the Korean rice wine brewing company goes global, asserting its position amongst the already well established alcohols. It will focus on if whether this company adapts to foreign culture and changes. To support the argument, sections of the marketing mix will be incorporated as well as theories.
Kook Soon Dang Brewing Co (KSDB)
Koreas major rice wine company, Kooksoondang Brewery (www.ksdb.co.kr) employs more than 400 people in South Korea and produces wide varieties and ranges of rice wine including Makgulli. Makgulli is one of the oldest alcohol beverages in Korea; a traditional Korean rice wine that is off-white color and milky; Makgulli is made by raw-rice being fermented without being steamed, a process that protects all its nutritional content from destruction a much-valued aspect. This method is environment friendly and also proven to reduce carbon dioxide and saves up to 60% of production process energy; this particular method of making the rice wine is one reason for this companys growing global success. By patenting their unique processes, this developing company now owns 12 different ways of producing rice wines, which adopt these advanced and eco-friendly brewing techniques, and allows the Asian, North American and European markets to sample its excellence.
Japan / Masculinity
Korea and Japan have geographical and historical similarity, which result in comparables in their countrys dimensions: power distance, individualism, and uncertainty avoidance are all the dimensions in which Japans society fits. However Hofstedes dimension model indicates that Japanese are much masculine dominated where as Koreans tend to be more centered around feminist issues; indicating that the Japanese seemingly value achievement, success, and money over other issues. Moreover, Hollensen (2011) claims that masculine culture exhibit different roles for men and women. KSDB considered Japans cultural difference and applied Hollensens theory to their product. The company launched 6 different derived products of Macgulli in Japan. Each kind is specifically designed to men or women and also indicated personal status. For example, Chutssul was top Macgulli line that is popular among Japanese businessmen. This only produced during harvest season and sold in limited amounts. On the other hand, Wooguksang is considered womens drink since it is low in alcohol but sweeter in taste. Through constant effort in understanding different dimension of Japanese culture, KSDB Co has increased their sales in the Japanese market for 14.5%, and it is still increasing every year thanks to its different marketing campaign and knowledge of the Japanese society.
China / Legal
According to Korea Agro-Fisheries Trade Corporation in 2011, Koreas Macgulli exporting to China regions sufficiently increased more than 600% compared to the 2010 figures; reaching a peak of millions of dollars of sales in China. Despite this incredible phenomenon, there are several barriers to entering Chinese market. On of which is Tariff a major threat to KSDB due to Chinas competitive market. Tariff on Korean alcohol product is extremely high compared to others, 42.3% of tariff is applied on Macgulli something that KSBD have struggled to overcome. The price of an item is clearly an important determinant of the value of sales made (The Times 100, 2011). In other words, KSDB is at a competitive disadvantage due to the tariff placed on the product creating a doubled price on Macgulli than other Chinese domestic product. As a result, KSDB could not compete based on price within China, as the tariff did not apply to their homemade products. China has an inclusive importing law, which allows its people to have a discretionary power over its customs and borders. For example, in 2008, Koreas alcohol beverage restrained from the Chinese custom clearance because the letter size on the bottle were 2mm over sized. However, China and Koreas governments are